A revolving loan fund is a source of money from which loans are made for multiple sustainable energy projects. Revolving funds can provide loans for projects that do not have access to other types of loans from financial institutions, or can provide loans at a below-market rate of interest (soft loans).
On-bill lending is a method of financing energy efficiency improvements that uses the utility bill as the repayment vehicle. Energy suppliers collect the repayment of a loan through energy bills. It leverages the relationship, which exists between a utility and its customer in order to facilitate access to funding for sustainable energy investments.
Bond is a debt investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate. Bonds are issued by companies, municipalities, states and sovereign governments to raise money and finance their projects and activities. Green bonds are all those instruments which are used exclusively to fund qualifying green investments. They can be made attractive via tax-exemptions.
Energy Performance Contracting (EPC) is a form of creative financing for capital improvement which allows funding energy upgrades from cost reductions. Under an EPC arrangement, an external organisation (Energy Service Company - ESCO) implements a project to deliver energy efficiency, or a renewable energy project, and uses the stream of income from the cost savings or the renewable energy produced to repay the costs of the project (including the costs of the investment). Essentially, the ESCO will not receive its payment unless the project delivers energy savings as expected.
Energy cooperatives refer to a business model where citizens jointly own and participate in renewable energy (RES) or energy efficiency (EE) projects. In energy cooperatives citizens are involved in both the decision making and financial & economical participation. All citizens are eligible to participate. After purchasing a cooperative share and becoming a member or co-owner of local RES and EE projects, members share in the profits and often are given the opportunity to buy the electricity at a fair price.
The Public Loan Facility complements the two other pillars of the Just Transition Mechanism, the Just Transition Fund (JTF) and a dedicated just transition scheme under InvestEU. It helps to address the socio-economic challenges of the transition to climate neutrality in the most affected territories as identified in the territorial Just Transition Plans.
The InvestEU Fund is a market-based and demand-driven instrument, with a strong emphasis on EU policy priorities. It supports the following 4 Policy Windows:
• Sustainable infrastructure
Financing projects in sustainable energy, digital connectivity, transport, the circular economy, water, waste, other environment infrastructure and more.
• Research, innovation and digitalisation
The Innovation Fund is one of the world’s largest funding programmes for the demonstration of innovative low-carbon technologies. The goal is to help businesses invest in clean energy and industry to boost economic growth, create local and future-proof jobs, and reinforce European technological leadership on a global scale.
This is done through calls for large (>EUR 7.5m) and small-scale projects focusing on:
innovative low-carbon technologies and processes in energy-intensive industries, including products substituting carbon-intensive ones
Horizon Europe is the EU’s key funding programme for research and innovation.
It tackles climate change, helps to achieve the UN Sustainable Development Goals and boosts the EU’s competitiveness and growth. Under it Pillar II, Horizon Europe is divided in 6 clusters:
